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For the Congress of the Livestock Production and Health group of the South African Veterinary Association, I gave a presentation about the economics of reproducttive performance. This presentation has quite some double information with other presentations I gave, based for a large part on the PhD work of Chaidate Inchaisri. However, some new elements (work of Niels Rutten) is included as well.
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Economic consequences of reproductive performanc ein dairy cattle
Henk Hogeveen, Chaidate Inchaisri and Niels Rutten
Changes over the years2
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009365
375
385
395
405
415
425
7500
7750
8000
8250
8500Calving interval (days) Milk production (kg/yr)
Jaar
Tuss
enka
lftijd
(dgn
)
Mel
k pr
oduc
tie (k
g/30
5 dg
n)
Problem ...... yeah but
I do not want to dry off my cows with 25 kg milk
I want less problems around transition
I have high productive, persistent cattle, so the damage is not too big
Well, a bit less milk .....
Is this right?
What can be influenced
Insemination decisions
Probability of conception ?
Probability of early-embryonic death ?
Oestrus detection
Detection/diagnosis reproductive disorders
Two decisions
When do I start inseminating
When do I stop inseminating
This presentation
Economic consequences long calving interval
Starting with inseminations
Stopping with inseminations
Heat detection (step counters)
Calving interval
Difficult calculations
Effect longer calving interval
●Less calves
●Lower production (kg/cow/day)
●More inseminations (?)
But also:
●Less costs around calving
●Less transition problems
●And how about persistence?
●Our solution: model calculations
8
Beware: Models ……. do not capture the complexity of the real situation
Beware: Models……. are sometimes nicer than reality (too good to be true)
Stochastic dynamic modelling
• Breed
• Parity
• Month of calving
• Milk production
• Farm level
• Relative performance
• Persistence
Cow
START OF CYCLE
12
Calf
Ovulation
Oestrusdetected
Insemination
Conception
yes
yes
yes
yes
no
no
no
no
cow
Probabilitiesbased on cow
factors
Quite complex
What are the values?
Costs lower milk production € 0.12 per kg (quota)
Returns calf: € 100
Costs calving (and transition): € 152
Costs inseminations: € 20
Just an estimation, it differs from farm to farm (of course)
Three different farms
Good Average Bad
Probability of ovulation (after 1st ) 1.00 0.95 0.90
Oestrus detection 0.70 0.50 0.30
Probability of conception 0.70 0.50 0.30
Incidence reproductive disorders (cyclicity) 0.03 0.07 0.11
Incidence repro disorders (conception) 0.20 0.27 0.33
Incidence embryonic death 0.05 0.07 0.09
Voluntary waiting period 9 12 15
Technical results
Good Average Bad
First insemination (wks) 10.5(9-13)
14.5(12-20)
21.7(15-35)
Calving interval (days) 362(342-408)
407(365-490)
507(394-670)
Ins. per cow 1.16(1-2)
1.61(1-4)
2.76(1-6)
Milk production (kg/cow/y) 8068(6329-9831)
7775(6188-9438)
7031(5441-8790)
Calves per cow pe ryear 1.02(0.90-1.08)
0.91(0.75-1.01)
0.74(0.55-0.93)
Not pregnant 0.00 0.00 0.21
Economic results related to good farm
Average Bad
Milk production 35 120
Calf sales 11 27
Not pregnant cows (culling) 0 128
Inseminations 5 20
Costs around calving -16 -42
Net total 34 231
Per day longer calving interval 0.57 0.70
Tool: www.wageningenur.nl/bec -> research -> decision support tools
Yeah but, selection space
This presentation
Economic consequences long calving interval
Starting with inseminations
Stopping with inseminations
Heat detection (step counters)
Decision one: starting with inseminations
Decision support difficult
Cow factors
●First ovulation
●Probability of oestrus detection
●Probability of conception
●Milk production
●Reproductive disorders
Economic factors
●Milk price
●Costs of insemination
●Costs of culling
●Costs of calving management
24
A complex system of interactions and
dynamics
What is the optimal voluntary waiting period
Dutch circumstances (not much seasonality)
We used to say: 60 days (as fast as possible)
Research:
●An optimal calving interval of 12 to 13 months is probably not applicable in all herds (Allore and Erb, 2000; van Amburge et al., 1997)
●Probably, the voluntary waiting period should be longer for herds with a high milk production and persistence (Abel et al., 2001; Sorensen and Østergaard, 2003)
Average performance
Voluntary waiting periods
6 wk 7 wk 9 wk 11 wk 13 wk 15 wkFirst insemination
10.9 11.5 13.1 14.8 16.8 18.5Calving interval
391 393 401 410 421 433MP/cow/year (kg)
8200 8188 8157 8112 8056 7997Inseminations perpregnancy 1.89 1.86 1.78 1.74 1.70 1.69Calves per cow per year 0.93 0.93 0.91 0.89 0.87 0.84
Not pregnanc (%) 0.018 0.019 0.021 0.025 0.030 0.037
26
Economic consequences (€/cow/year)
Voluntary waiting periods
7 wks 9 wks 11 wks 13 wks 15 wksMilk production
2.2 8.9 18.3 32.4 46.4
Calves 0.1 0.3 0.6 1.0 1.7
Culling 0.4 1.6 3.4 6.3 10.1
Inseminations -0.5 -1.6 -2.0 -2.8 -3.1
Calfmanagement
-0.1 -0.5 -1.0 -1.8 -2.9
Net total 2.1 8.6 19.0 34.2 52.2 (-16-22) (-11-32) (-6-53) (4-78) (13-106)
27
Average
0
10
20
30
40
50
60
6 7 8 9 10 11 12 13 14 15Wachttijd (weken)
Net
to v
erlie
s (€
/koe
/jaar
)
6 weeks not always optimal29
0
5
10
15
20
25
30
35
40
6 7 8 9 10 11 12 13 14 15
Per
cent
age
koei
en
Optimale VWP (wk)
Longer VWP when:
Cow factors
●Parity 1●Not HF●High persistency●Low production●Late production peak●Calved in winter●Bad oestrus detection●Delayed first ovulation●Reproductive disorders
Economische factoren
●Lower costs decreased milk production
●High costs insemination
●High costs culling
30
Summarizing
For 90% of the cows: optimal VWP <10 weeks
Optimal VWP differs from cow to cow
So no group management, but individual cow management (precision dairy farming)
31
Tool: h
ttp://w
ww
.wagenin
genur.n
l/bec/
This presentation
Economic consequences long calving interval
Starting with inseminations
Stopping with inseminations
Heat detection (step counters)
Question 2: When to stop
Difficult question (again)
Stopping = cullnig So: optimization Difficult model; probability of conception is dependent on:
●Parity●Lactation stage●Milk production●…….●Number of previous inseminations (more -> lower
probability) Models so far:
●Conception as constant (Groenendaal et al., 2004; Nielsen et al., 2010)
●Linear decreasing value per month (De Vries, 2006)●Marginal probility for different months (Houben et al.,
1994; Jalvingh et al., 1993)
Existing model (De Vries et al, 2006)
Three scenarios:
●I Constant probability of conception during lactation
●II Probability of conception dependent on months pp and parity
●III Probability of conception dependent on months pp, parity and previous inseminations
Input
Epidemiological research for Dutch cows (Inchaisri et al.,2011)
Literature, reports
Expertise
Probability of conception
Scen. Parity Months pp
3 4 5 6 7 8 9 10 11 ≥ 12
I 1 0.42 0.42 0.42 0.42 0.42 0.42 0.42 0.42 0.42 0.42 2 0.41 0.41 0.41 0.41 0.41 0.41 0.41 0.41 0.41 0.41 3 0.41 0.41 0.41 0.41 0.41 0.41 0.41 0.41 0.41 0.41 4 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 ≥ 5 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38II 1 0.45 0.43 0.41 0.38 0.36 0.34 0.32 0.3 0.3 0.3 2 0.45 0.43 0.41 0.38 0.36 0.34 0.32 0.3 0.3 0.3 3 0.44 0.42 0.40 0.37 0.35 0.33 0.31 0.29 0.29 0.29 4 0.43 0.41 0.39 0.36 0.34 0.32 0.31 0.29 0.29 0.29 ≥ 5 0.41 0.39 0.37 0.34 0.33 0.31 0.29 0.27 0.27 0.27III 1 0.46 0.44 0.4 0.37 0.35 0.34 0.35 0.38 0.38 0.38 2 0.45 0.43 0.39 0.36 0.34 0.33 0.34 0.37 0.37 0.37 3 0.44 0.42 0.38 0.35 0.33 0.32 0.33 0.36 0.36 0.36 4 0.43 0.41 0.37 0.34 0.33 0.32 0.33 0.35 0.35 0.35 ≥ 5 0.42 0.40 0.36 0.34 0.32 0.31 0.32 0.34 0.34 0.34
38
Economic values
Value Source
Milk price, €/100 kg 34.46 Wageningen University (2010)
Calf price, €/calf 84 Wageningen University (2010)
Costs young stock raising, €/heifer 1540 Mohd-Nor et al. (2011)1
Returns culled cows €/kg life weight. 0.82 Wageningen University (2010)
Insemination, €/insemination 15 KWIN (2009)
Feed costs lactating cows, €/kg dm 0.11 Wageningen University (2010)
Feed costs dry cows, €/kg dm 0.07 Wageningen University (2010)
Variable labour, €/hour 11 KWIN (2009)
Fixed labour, €/cow/day 1.37 KWIN (2009)
Veterinarian, €/cow 100 Expertise
Other costs, €/cow/day 1 Expertise
Costs culling, €/cow 100 Expertise
39
Calculations
Retention pay-off (RPO)
● Discounted future returns when keeping a cow – discounted future
returns when culling the cow
● > 0: keep
Insemination value
● Discounted future returns when inseminating now – discounted
future returns waing
● > 0: now inseminating
Decision to stop with inseminating
● If RPO < 0 or
● Insemination value < 0
Results model
Scenario
I II IIIMilk returns, €/cow/year 2951 2950 2947Total returns, €/ cow/year 3141 3147 3141Total costs, €/cow/year 2609 2627 2619Profit, €/cow/year 532 520 522Milk production, kg/cow/year 8564 8562 8553Interval calving-conception 120 115 117Pregancy % 24 24 24Yearly culling, % 23 24 24
41
Insemination values parity 1
42
-50
0
50
100
150
200
3 4 5 6 7 8 9 10 11 12 13 14 15 16Inse
min
ation
val
ue (€
)
Months in milk
Scenario I, 100% LV Scenario II, 100% LV Scenario III, 100% LV
Insemination values parity 1
43
-50
0
50
100
150
200
3 4 5 6 7 8 9 10 11 12 13 14 15 16Inse
min
ation
val
ue (€
)
Months in milk
Scenario I, 90% LV Scenario I, 100% LV Scenario I, 110% LVScenario II, 90% LV Scenario II, 100% LV Scenario II, 110% LVScenario III, 90% LV Scenario III, 100% LV Scenario III, 110% LV
Insemination values parity 2
44
-50
0
50
100
150
3 4 5 6 7 8 9 10 11 12 13 14 15 16
Inse
min
ation
val
ue (€
)
Months in milk
Scenario I, 100% LV Scenario II, 100% LV Scenario III, 100% LV
Insemination values parity 2
45
Insemination values parity 3
46
-50
0
50
100
150
3 4 5 6 7 8 9 10 11 12 13 14 15 16
Inse
min
ation
val
ue (€
)
Months in milk
Scenario I, 100% LV Scenario II, 100% LV Scenario III, 100% LV
Insemination values parity 3
47
Conclusions
Stop inseminating:
10-16 months pp (!!) -> max. calving interval ± 600 days
Heifers longer (16 months) then older cows (10 months)
Effect milk production: ± 3 months
48
Conclusions
Different scenarios:
Effects at cow level
Not at farm level
Effect of milk production and parity is much higher
49
This presentation
Economic consequences long calving interval
Starting with inseminations
Stopping with inseminations
Heat detection (step counters)
Automated oestrus detection
Sensor system
Sensor Metingen (data)
Detectie algoritme
Tocht alert
Sensor system
Activity sensor on collar
Performance
●Sens. ~62-90% Spec. ~>90%
Oestrus No oestrus
Alert Correct + False +
No Alert False - Correct -
Goal of the analysis
Activity sensors
Calving interval has economic consequences
Is automation profitable?
Herd of 130 dairy cows
Titelstijl van model bewerken• Klik om de tekststijl van het model
te bewerken– Tweede niveau
• Derde niveau– Vierde niveau
» Vijfde niveau
Simulation model
• Base on previous model
• Ovulation->detection->insemination
• Calving and culling
• Results (per farm per year):• Milk production • Feed intake• Inseminations• Calves• Culled cows
Culling rules
●Not pregant after 35 weeks of after 6 inseminations
●Random, dependant on age
●Rules (20%), random (80%)
Titelstijl van model bewerken• Klik om de tekststijl van het model
te bewerken– Tweede niveau
• Derde niveau– Vierde niveau
» Vijfde niveau
Two simulations
Visual SN 50%, SP 100% Sensor SN 80%, SP 95%
Labour
●Labour costs 18 €/hr
Task Time
Oestrus detection 10 min/day
Confirmation oestrus 5 min/alert
Checking alers 2.5 min/day
Investments
●Discount rate (intrest): 5%
●Depreciation 10 years
●Activity meters: 108 €/cow
●System: 3600 €/herd
Titelstijl van model bewerken• Klik om de tekststijl van het model
te bewerken– Tweede niveau
• Derde niveau– Vierde niveau
» Vijfde niveau
Cashflow (*1.000 €/farm/year)
Milk 330 334
Feed -128
-129
Calves
-7 -8
Inseminations
-7 -7
Culling
-7 -6
Labour
-1 -0.7
Titelstijl van model bewerken• Klik om de tekststijl van het model
te bewerken– Tweede niveau
• Derde niveau– Vierde niveau
» Vijfde niveau
Investment analysis
Cash flow(€/Year)
Internal rate of return (%)
Payback time (years)
Average 3,151 11% 7
Titelstijl van model bewerken• Klik om de tekststijl van het model
te bewerken– Tweede niveau
• Derde niveau– Vierde niveau
» Vijfde niveau
Effect of sensitivity (sn) and specificity (sp)
Titelstijl van model bewerken• Klik om de tekststijl van het model
te bewerken– Tweede niveau
• Derde niveau– Vierde niveau
» Vijfde niveau
Conclusions
• Investment in activity meters is cost effective
• IRR on average 11%
• Sensitivity important
Finally…..
Calving interval is costly
Costs prolonged calving interval are high -> room for improvement
Differences between farms
Early start of inseminations
●With exceptions (cow-specific management)
Long continuation with inseminations
●With exceptions
Improved oestrus dtection is valuable
65
Thank youFor yourattention